DEFINITION of 'Below Market Interest Rate - BMIR'
Housing-related programs in the that offer loans to qualified applicants at interest rates that are lower than prevailing market rates. Many cities have programs in effect that extend below market interest rate (BMIR) loans to individuals with limited incomes, either for buying a home or for making home improvements. The Department of Housing and Urban Development (HUD) also has a BMIR-based rental program for HUD-assisted residents.
BREAKING DOWN 'Below Market Interest Rate - BMIR'
The interest rate for BMIR programs is significantly below market interest rates, and is as low as 0% in some cases. The actual interest rate depends on factors such as cost of credit, the homeowner's creditworthiness, the loan amount and the term of the loan. BMIR also allows owners of government subsidized housing to pass the savings onto tenants by offering lower rent.
The HUD's BMIR program was created in 1988, when about 300 of its BMIR multi-family housing mortgage loans were purchased by the Arkansas Development Finance Authority, with the objective of preserving thousands of low-income housing units.